Latest fuel price hikes will affect agriculture sector, economist warns
South Africa’s sharp September fuel price increase raises costs for farmers ahead of the summer planting season, with possible El Niño-related drought conditions adding pressure on agricultural production.
FNB Bank senior agricultural economist, Paul Makube, says today's sharp fuel price increase comes at a sensitive time for the agricultural sector.
The price hike for September comes just weeks before the start of the summer crop production season.
Petrol prices have increased by R1,34 per litre, and diesel prices by between R2,93 and R3,15 per litre.
The increases have been driven by higher international oil and petroleum product prices amid the ongoing US-Iran tensions, uncertainty over oil shipments through the Strait of Hormuz and supply shortages linked to the Russia-Ukraine conflict.
A higher slate levy has also added to the increases, despite a slight strengthening of the rand against the dollar.
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Makube says the renewed surge in diesel prices suggests cost pressures may start to rebuild across the agri-food value chain.
“ The fuel hike does not point to an immediate food security crisis, but it does create a more challenging cost environment as the new season begins.
“Against a backdrop of elevated input costs, the potential for El Niño-induced drought conditions in the coming season poses a substantial downside risk to the agricultural production and profitability.”
The latest seasonal forecast from the South African Weather Service indicates that below-normal rainfall is the most likely outcome over most of South Africa between October and December 2026.
At the same time, above-normal temperatures are expected across much of the country.
